A report prepared by The Brattle Group for Potomac Electric Power Company (Pepco) and Delmarva Power & Light Company evaluates how demand-side resources and time-of-use (TOU) rates could help reduce peak electricity demand and potentially avoid or defer future distribution system investments.

The report, “Deferring Distribution System Upgrades: Considerations for Expanding Non-Wires Solutions and Time-of-Use Rates,” was prepared in response to requirements of Maryland’s Distributed Renewable Integration and Vehicle Electrification (DRIVE) Act and related Maryland Public Service Commission orders.

Brattle evaluated a broad portfolio of existing and proposed resources – including front-of-the-meter and behind-the-meter batteries, managed electric vehicle charging, cooling load management, commercial and industrial demand response, behind-the-meter solar, and energy efficiency. For each resource, the team assessed peak-load reduction potential, cost per kilowatt of peak reduction, ability to target specific locations and times, operational considerations, and suitability for avoiding or deferring distribution investments.

The analysis found that the ability of distributed energy resources to defer traditional grid investments depends on more than their overall capacity. To provide distribution planning value, load reductions must occur in the right location and at the right time, be large enough to address the relevant constraint, and be sufficiently reliable to incorporate into utility planning. The report also identified opportunities for emerging technologies and programs – including managed EV charging, battery storage, VPPs, and geographically targeted demand response – to play an increasingly important role in future non-wires solutions as utility visibility and control capabilities mature.

The authors also assessed the merits and feasibility of transitioning residential customers from voluntary TOU rates to an opt-out TOU structure. Drawing on empirical evidence and experience from utilities across the United States, the team compared opt-in and opt-out approaches and evaluated customer participation, peak-demand impacts, implementation requirements, customer protections, communications, digital tools, metering, and IT needs.

Brattle’s modeling illustrates the potential scale of the opportunity. Assuming 80% of customers remained on an opt-out TOU rate with a 2.8-to-1 peak-to-off-peak price ratio, the analysis estimated a 3% reduction in system peak demand – approximately 93 MW for Pepco and 36 MW for Delmarva Power at current peak levels. By comparison, an opt-in program reaching 10% participation under the same rate design was estimated to reduce system peak demand by approximately 0.5%.

The report concludes that broader deployment of demand-side resources and TOU pricing could create meaningful opportunities to improve the utilization of existing infrastructure and reduce system peaks, while emphasizing that successful implementation requires careful integration with distribution planning, customer engagement, technology, and utility operations.

The full report – authored by Managing Energy Associate Akhilesh Ramakrishnan, Senior Energy Associate Dr. Goksin Kavlak, and Principals Dr. Sanem Sergici and Ryan Hledik – is available below.

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